Backtest Your Grain Trade Ideas

CropProphet Enables Grains Market Strategy Testing

The 1 Minute Summary

  • Do you remember the early July 2017 corn market? It was convinced yields were decreasing based on weather negatively impacting the corn crop.  CropProhet was forecasting the opposite.   Users of CropProphet could have profitably traded on this information.
  • CropProphet users had a 2 or 3 month advance indication of the final outcome of the 2017 season.
  • CropProphet users have access to a 15 year history of the daily forecasts CropProphet would have made.
  • The history of crop forecast information can be used to test trading ideas and strategies and is available via a CropProphet Enterprise Modeller subscription.

CropProphet for the Grains Market

CropProphet provides access to an simple to use web interface and FTP access to all data for the current growing season, an option is also available providing access to as much as 33 years of daily crop season CropProphet forecasts.  Each year we update our forecast models not only with the the prior years data, but also with our best new modelling ideas to improve the forecasts.  Each time the model is improved, we also create a "hindcast" of all available prior years.  We create a history of what CropProphet would have forecasted for the prior 33 years.  This allows you to test and optimize grain trading ideas based on our forecast.

To further illustrate this concept, two charts and an important map are shown below.

2017 National Corn Yield forecast progression

This chart shows the 2017 National Corn Yield forecast as it progressed during the season from the

first week of May to approximately October 1.  The detail is explained below.

Red Diamonds The August 1, September 1, and October 1 market consensus expectation for the USDA's monthly crop yield estimates 

Green Line - The 2017 daily updated CropProphet national yield forecast (i.e. our forecast of the USDA end of season crop yield)

Blue Line -  The intraseason USDA national corn yield estimates.   The early portion of the season is taken from the monthly WASDE reports. 

Black Line  - The December 2017 corn futures prices.

CropProphet Corn Season Analysis

So What?

Why is this chart important to you?   Let's look at what happened during the 2017 corn growing season.

#1 (on chart to right) - The red circle shows a short 3 to 4 week period in which the CropProphet national corn yield forecasts rapidly increased. The weather during this time period significantly impacted the growth of corn in the central and eastern Corn Belt, and this is reflected in the evolution of the forecast.  The map image  to the right shows the change in corn yield forecast based on the 14 day forecast on July 10, 2017.  The impact of this forecast on the national yield estimate was estimated at +3.8 bu/acre.  These significant trends in the yield forecast ended up being correct.

#2 - Note that during this period, Corn prices for December contracts were rising, a signal counter to the increased yield being predicted by CropProphet.

#3 - By early August, the CropProphet corn yield forecast is approximately 8 bu/acre higher than the consensus.   Corn prices have started their decline by this time as the market realizes that end of season yields will be higher than previously expected.

July 10 , 2017 Corn Yield Forecast

#4 - Over the next two months the CropProphet forecast trended towards higher corn yields, the market consensus increased, and the USDA estimates increased.  By early November, the USDA yield estimate and the CropProphet forecast were remarkably similar.  CropProphet users had a 2 or 3 month advance indication of the final outcome.

Crop Yield Forecast Histories Available - Test Your Ideas

Subscribers to the CropProphet Modeller edition will receive a digital version of the history of 15 years of daily CropProphet crop production and yield forecasts.  This data is intended to allow grains market participants to build and test trading strategies based on CropProphet forecasts.

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